Begbies Traynor Share Discussion Threads

[topvest] 08/10/2019 08:18

Well done. Very impressive. I had a high cash position and repaid my mortgage just before the last recession (in 2007 actually) so didn't do that badly.
I think you seem to be ahead of the consensus though, so I very much appreciate and respect your thoughts.
I'm c26% cash at the moment and thinking about opening a FTSE-SHORT ETF as and when things get jumpy.

[aleman] 07/10/2019 21:22

Yes. I'm on record of having called a recession by the end of 2008 after the yield curve inverted around June 2006. I posted that view on a few ADVFN threads then and subsequently. I sold my Lloyds shares at the time around £5.50. I became bullish again at the end of October 2008, as posted frequently on the JTC thread where some seemed to think I was mad. (See post 17015, 17111 and onwards.) The FTSE 250 double bottomed in October and November and the recent bull market started. I picked up a host of bargains on double figure yields over the following few months.

[essentialinvestor] 07/10/2019 20:56

US national debt has increased by about a third over the last 3 years.
That's Trump's economic miracle (mirage) for you.

[topvest] 07/10/2019 20:53

We must also be very close to recession now that the UK government are talking of ending austerity. Politicians always get it hopelessly wrong.

I also find that my employer always gets it wrong. You know when a recession is close when salary inflation is high....top of the market!

At the end of the day, economic forecasts are totally unreliable, as ever. They are always based on projecting what happened yesterday, rather than really thinking about what will happen tomorrow. Politicians still seem to believe that the BREXIT forecasts are accurate. It will be the first forecast to be accurate, if it is!

[topvest] 07/10/2019 20:51

Interesting. We are not quite in recession yet in my view. Next year for me. Trump will be looking to prop up the US economy until he gets re-elected and so I wouldn't under-estimate what he can do to keep the wheels on, albeit temporarily.

Out of interest, did you predict the last recession and when did you go bullish?

[aleman] 07/10/2019 20:43

Now. GDP at the start of slowdowns has a habit of being revised down later so we might be doing worse than the headline numbers. US auto sales were down 11% last month. Truck orders have been down 80% for a couple of months. RV sales are down about a quarter. Boat companies report falling orders. Harley laid workers off and several car plants are being closed. Lots of layoffs have been announced and GM workers have gone on strike while Boeing is in a mess. Semi-conductor sales are down. Freight rates are down. Corporate earnings are being revised into negative territory. Insiders are selling shares in record amounts. The weakening oil price is seeing insolvencies rise in the oil sector with banks on the hook for lots of debt. Mall vacancies just hit a record high. Some of the Regional Fed surveys plummetted recently and the small business survey weakened recently but looked worse if you examined the components that made it up. It already looks bad and likely to get worse as dominoes topple.

[topvest] 07/10/2019 20:23

You might be right. When would you predict the recession to take hold in the US and UK? I think next year could be sticky, running into 2021 with recovery starting in 2022 but estimating the future is near impossible.

[aleman] 07/10/2019 19:33

It could go a lot higher this time. The last recession was deep but was concentrated in the financial businesses and the sharp interest rate cuts quickly came to their rescue and saved loads of zombie companies in the wider economy that probably should have gone bust. (Those that don't make enough profit to cover interest, being the major definition. Estimates vary from 5-20% of firms but definitions vary.) I think the current recession could be more widespread through the sectors, even if not as as deep in GDP terms, but it is likely to be very harsh on zombies since there must be limits on how much lower rates can be taken when spreads jump. Last time, junk bond spreads rocketed but rate cuts offset some of the increase and soon brought them back down again as the market quickly regained its appetite for risk. This time, if junk bond spreads rocket, I don't see there being enough rate cuts to offset them, and QE will likely be restricted to top grade bonds, and the economy won't turn so quickly, so junk spreads will possibly stay sky high and zombies could go to the wall in numbers not seen before. If that's the case, BEG will be exceedingly busy. (Perhaps, the B of E will come up with some way to contain junk spreads. Who knows?)

Beside the interest rate aspect, there is an increased domino effect from the government's new insolvency legislation that prioritises money owed to it, leaving less for other creditors. More supply and service companies will go bust from a customer not paying up in administration, or paying up less. The administrator will be settling government dues first. This might actually generate extra demand for credit amongst struggling smaller companies, and help to push junk bond spreads up even higher.

Then add in more debt from student loans, car leases (with increasing negative equity rolled-over into longer leases), more credit cards (many on interest free periods) and higher balances, and this recession looks set to be a more difficult one on many levels.

Now add in the wildcard of LIBOR being abolished in two years and that it's likely to get more volatile as it runs down at a time when any banking stresses might see it spike. Liquidity in LIBOR is expected to start drying up in H2 of next year. Some business loans, student loans, mortgages and car leases are linked to LIBOR and some will need renegotiating over the next two years as banks move over to loans linked to SOFR and/or SONIA. Some people will be struggling with their existing LIBOR loan in a recession and banks might not be terribly keen about renegotiating a new loan from some customers. What happens to LIBOR loans that were negotiated to run past liquid LIBOR next year or abolition in 2021? I fancy this will throw up problems. Some people are comparing this to the millenium bug. It might not be a problem if people put a lot of work in to head off the problems. If they don't ....

[topvest] 07/10/2019 19:09

Yes, it's taken forever, but are we back in a big upswing before the next recession. Last time is 11 years ago when it got to £2. My initial target is over a £1, but could go to £1.50 I think.

[aleman] 07/10/2019 18:45

Highest close for nearly 10 years.

[magic] 07/10/2019 18:37

Bristol construction company behind Bear Woods at Wild Place Project collapses into administration (Begbies)

hxxps://www.bristolpost.co.uk/whats-on/whats-on-news/bristol-construction-company-behind-bear-3400328

Looks bearish to me!

[aleman] 07/10/2019 13:41

Been some steady buying at 86.4p or higher and the spread is getting a bit wide. Often, that's a sign of marketmakers being short of stock. I'm wondering if there's been another tip somewhere but, regardless, a new high looks possible.

[topvest] 01/10/2019 11:58

It's all looking very positive here. 100p target.

[aleman] 30/9/2019 22:48

Remember that businesses don't run out of cash just from trading activity. In the credit crunch of 2008, some companies had their overdrafts halved with no notice and found they could not revolve longer debt at suddenly increased rates for lower grades of debt. In steady times, there might be regular seasonal cycles, but these can go out of the window when banks start getting into trouble. (And there have been liquidity shortages in the US and China recently - not that that necessarily has any influence on the UK, though it might be possible.)

[magic] 30/9/2019 21:34

thanks, maybe the two tips together gave beg such a boost.
I see about half the gains were clawed back by end of day
motley fool is a bit self referencing, re quoting BEG, and a bit superficial
the peak insolvency month was March for 2018
wouldn't surprise me if there is an even larger peak in march 2020, as businesses run out of cash after xmas

hxxps://insolytics.co.uk/insolytics-league-table/

[aleman] 30/9/2019 17:40

Tipped by Motley Fool over the weekend, too.

[magic] 30/9/2019 14:42

thanks, bit surprised at size of bounce, +12%,83p (14.30). I guess Mail has a large readership. Not sure if it will hold. Encouraging that uninformed money makes this difference, even before headlines about actual large increases in bankruptcies.

Highlights possibly the difference between perception and the actual financials for BEG.

[podgyted] 19/9/2019 17:21

Does anyone know if TW turned up at the AGM?

[aleman] 19/9/2019 11:28

Somebody give the ADVFN monitors a kick. The shares are up and the spread is 74p-76p.

[aleman] 19/9/2019 11:25

I hadn't noticed that they'd started doing presentations:

[aleman] 19/9/2019 08:11

We remain confident of delivering current market expectations this year.

Sounds like they might be slightly ahead of forecasts again.

[cravencottage] 18/9/2019 17:45

Looks like he has an axe to grind with Ric Traynor.

Hopefully this will all be cleared up at tomorrow's AGM and a positive outlook statement will get us back up into the 80's

Meanwhile a nice divi on the way for all those patient shareholders and at some stage a major re-rating.

[topvest] 18/9/2019 15:22

Not backing down then.